The stability of every building, be it a small cabin or a skyscraper, depends on the design of the structure it is built upon. The architects of the building have to come with the right structure. If the plans are faulty either on paper or in implementations would result in the formation of a weak structure. Often, the building may seem to be sturdy in appearance but may cave in sometime in the future due to the faulty designs used to erect it. This collapse may be due to some factor which the architects failed to foresee or because the design was faulty in essence.
The same is true for organizations. The structure that is used in the organization is an essential factor which determines the way the organization will work and, hence, the success or failure of the organization. However, the term organizational structure does not refer to the building in which the business performs its operations. Organizational structure refers to the way the employees are staffed across the organization.
On the face of it, designing the organizational structure may not be that difficult a task. In reality it is an extremely crucial and tedious job. Designing the structure of an organization becomes increasingly difficult with the size of the organization at hand. Designing the structure not only involves the placement and number of human resource required in each department but also the line of command, reporting authorities and the allocation of tasks for every resource working at the organization. In short, it pretty much determines the shape of the organization as a whole.
The organizational structure determines the way and direction in which the organization is trying to move. It also depicts the leadership styles and roles involved throughout the organization. It also shows the number of departments and the shape and number of people involved in the upper and the lower management tiers.
However, one thing that must be strictly taken into consideration is the span of control and the chain of command that is used when designing the structure of the organization. A right mix should be used when determining the number of people reporting to a single individual. A narrow span of control represents that the manager or reporting authority should have more control over his subordinates. However, it could also represent an underutilization of the manager’s abilities and skills resulting in an inefficiency disorder within the organization.
The same applies when determining the chain of command. The chain command refers to the number of positions that report to somebody senior. A longer chain of command would depict a democratic leadership style adopted by those at the top of the organization. A narrower chain would represent a dictatorship where more people directly report to the President. However, it is important to note that there is no best organizational structure – they vary from case to case, organization to organization, industry to industry and time to time.